Legal Question in Insurance Law in Ohio
1 year ago I took over paying premiums on my life insurance. (my mother had gotten this 20+ years ago, she passed away last year and I took over) yesterday I received a bill for payment of interest on a loan my mother took out against my policy in 2003. I called insurance and they said I was responsible for paying this because the loan follows the policy. If I do not pay my insurance will lapse and I will receive a 1099 form and will be responsible for paying taxes on this loan. Money that I never touched! Can you please tell me how to handle this. I really don't care if my insurance cancels, but I don't want to fight the I.R.S. Over tax dollars. (especially on money I never received) thank you, Brad
1 Answer from Attorneys
Your question is phrased as one of insurance law, but it really has more tax implications. You might want to check with a CPA or whoever does your taxes for advise on how to handle the IRS situation. You might also check with a probate attorney to see if the loan obligation or the interest is a debt of your late mother's estate.
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